Written by Eddy Hood
During your everyday life you probably find yourself with the need for extra money. It could be to repair your car, purchase new furniture, purchase new appliances, take a vacation or hundreds of other valid reasons to need money. For most people an unexpected expense can create a financial problem. To solve this problem, consumers and small businesses can create a budget to track income and expenses. By understanding how much income you have to work with and establishing spending limits, you should be able to meet your expenses and hopefully have money left over for the expected or unexpected expenses.
In order to set your budget, it is important to determine what your financial wants and needs are. A want would be an item or expense that you would want to have. For example, you may want to go on vacation to Hawaii, but it is not essential to everyday life. On the other hand, food would be something that everyone needs to live. So, in order to establish your budget, you need to identify what you want and what you need.
To make your budget work, you need to come up with typical expenses that you have on a monthly basis. These expenses could include, housing, utilities, loans, credit cards, insurance and other expenses that are paid monthly. Once you have these static expenses, then you can budget for flexible expenses, which would include food costs, entertainment, savings, and similar expenses. However, proper personal or business bookkeeping records are important to be successful in creating and maintaining your budget.
To make the budget successful for the unexpected expenses, you should make it a priority to pay yourself. Establish a savings plan where you set aside a preset amount of money each month. These accounting measures could also be done on a weekly or bi-weekly basis. The important thing is to be focused on doing this regularly.
Keeping to a budget is not easy. But with being vigilant to keeping to set expense amounts, you have a very good chance of meeting your normal expenses, as well as having money available for your needs and wants. Also, we recommend that you keep copies of receipts and other documentation for financial reporting purposes. To help you achieve your personal and small business budgeting goals, we have provided a number of useful websites to help guide your planning.